NZ electronic card transactions at retailers climb 0.3%

Thursday 9th April 2009

New Zealand spending on debt and credit cards at retailers rose for a second month in March, providing an early sign that consumers may be stirring from their recessionary sleep.

Transactions in retail industries rose 0.3% last month, following a 0.5% gain in February, according to Statistics New Zealand. Transactions at core retail industries, which excludes motor vehicle-related outlets, gained 0.7% in the latest month.

"While the rate of spending is likely still below inflation, meaning volume of expenditure is contracting, the level of nominal spending in recent months appears to be stabilizing," said Shamubeel Eaqub, economist at Goldman Sachs JBWere. Still, "the outlook is uncertain due to accumulating evidence of a rapidly deteriorating jobs market."

The electronic transaction figures give a timelier snapshot of consumer spending than the monthly retail sales series, which has a two-month lag. The central bank predicts the jobless rate will increase to 5.2% this year and 6.8% in 2010 as companies eliminate jobs to cope with the downturn in demand.

"With a heavily indebted household sector, widespread job losses may have significant consequences for the retail sector and the economy more generally," Eaqub said.

Statistics New Zealand is scheduled to release retail sales for February on April 14. Sales probably fell 0.3%, according to a Reuters survey. Excluding autos, sales may have gained 0.1%.

Businesswire.co.nz

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